UPDATE 1-JKX plans capex cut to offset tax hike in Ukraine

Sept 22 (Reuters) - JKX Oil & Gas Plc said it would substantially reduce its capital expenditure to offset the impact of higher production taxes introduced by the Ukrainian government last month.

Shares in company fell more than 12.5 percent in early trading, making the stock one of the top percentage losers on the London Stock Exchange.

JKX, which has most of its production assets in Ukraine and Russia, said last month that it would take “operational and financial measures” after Ukraine almost doubled its gas production tax rate to 55 percent between Aug. 1 and the end of the year.

The additional production tax costs due to the legislation was $10 million for the five-month period from August to December 2014, the company said on Monday.